Linux is better option as it is reliable and cost effective too. However, if a website or application requires windows components like asp.net or mssql database, then you have no choice but to use windows OS.

Cloud is being "but around Linux"... which means that the Linux technologies are driving force of the Cloud computing. At some point it is possible more Cloud instances (whatever that means) to run on Windows OS than any Linux distributions, I doubt that however? @Leasedlayer.com Why do you ask this question? Your website says that you offer "Cloud VPS". Do you wander which one would be selling better?

There are a ton of different virtualization platforms to choose from: HyperV (Windows), XenServer, VMWare, OpenStack, OnApp, and so many more. Most will run both Linux and Windows VPS/VM's side by side with the right configurations. Consult with me if you don't know where to get started.

Operating System for Cloud can be chosen according to the requirement and depends on the applications you are looking forward to host and same applies for the website hosting. For example, if you are in need of PHP or ASP.NET applications, then Windows can be the best option.